A grid operator or balancing authority may determine the base amount of active power that power producing facilities such as fossil plants, hydro plants or wind power plants may be allowed to produce at any specific time, i.e. the amount of power required by customers supplied by the grid, and issue appropriate references to any power plant that feeds into the grid. Such power plants are generally characterized by their ability to regulate the real or active power within some dynamic range depending on various factors such as environmental conditions, the number of power production units up and running, the type of technology used by the power plant, etc. The active power response rate and the reactive power response rate of a power plant also depend on the plant type. The proportions of active power and reactive power that are required from the power plants may vary according to the load on the grid and the grid voltage. Conventional power producing plants—in which power is not generated from “renewable” energy sources—can increase or decrease their power output as necessary and can respond to the momentary demand situation. In the case of power production plants that produce or generate electricity using renewable energy sources such as wind energy or solar energy, the amount of power that can be output depends to some extent on the environmental situation, for example the strength of the wind in the case of a wind power plant; or the time of day and extent of cloud cover in the case of a photovoltaic power plant.
Reactive power is injected or extracted from the power network in order to control the grid voltage. Conventional power networks, comprising only power production plants that feed into the electricity grid, generally comprise some means of absorbing and generating reactive power, and the amount of reactive power that is absorbed or released is governed by the grid operator. Reactive power is the imaginary component of the power vector. Reactive power is absorbed or generated (released) by different components or elements of a power production facility, such as shunt capacitors, shunt reactors, etc., and these must be controlled precisely since the flow of reactive power in the power production facility influences the voltage levels at the point of connection between the power production facility and the electricity grid. Renewable power plants that use state of the art power electronics are capable of supplying reactive power control directly from an inverter only using reactors or capacitors as supplemental components whenever the grid needs additional reactive capability.
The amount of power generated by a power production facility is regulated or managed by a plant operator, which ensures that the power fed from a power plant into the grid fulfils the grid requirements at all times. A conventional power plant controller can be designed to operate with a local operator-controlled voltage or reactive power reference (also referred to in the following as an “MVAr reference”), or it can be configured to operate with a remote controlled voltage or MVAr reference issued by the grid operator or transmission operator. As indicated above, the ability of a renewable power plant to respond to grid demands—whether for active or reactive power—is limited by its dependency on the current or momentary environmental conditions.